Oil Trading on Deriv. Table of Contents
Trade Commodity CFDs on Deriv
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On Deriv’s trading platforms, the popular commodities are Gold/USD, Palladium/USD, Platinum/USD, Silver/USD and Oil/USD.
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Before start trading Oil/USD on Deriv, it is important that you know the current situation and the trend of the market.
Here is a summary of the current situation that surrounds the Oil market.
WTI’s price was on the rise since the start of the week
WTI’s price was on the rise over the past few days and characteristically reached a new six-week high yesterday.
The commodity’s fundamentals seem to include worries from the Coronavirus surge, especially in India yet also in other places such as Japan, while on the flip side there seems to be also some optimism regarding the commodity’s demand outlook as the vaccination process seems to intensify in areas such as Europe, the US and the UK.
We plan to focus on these issues in today’s report and at the end we will be providing also a technical analysis complimenting the commodity’s fundamentals.
The weekly Oil market data in focus
We make a start with the most recent releases regarding the oil market, as they also tend to illuminate the situation on the ground for the commodity.
In the US the Baker Hughes oil rig count reading ticked down to 343 active oil rigs, highlighting a stabilization currently in the number of active oil rigs in the US.
On Tuesday the API weekly crude oil inventories figure showed a considerable increase of inventories as high as 4.3 million barrels, while on the contrary the EIA crude oil inventories figure implied that demand was in effect able to catch up with production levels, as it noted an insignificant built up of only 90 thousand barrels.
Hence overall, there seems to be a weakening of the demand side, despite the EIA reading on Wednesday.
The surge of Covid in India and Japan creates worries
As we noted before, the increase of Covid cases in India and Japan, tended to create substantial worries for oil’s demand-side hence tends to weigh on oil’s prices, practically holding back on oil’s possible rally.
It’s characteristic that the number of new daily cases in India, continued to mark new highs yesterday, reaching almost 359.5 thousand new cases, the highest to date.
In Japan, the number of new daily cases seems to be retreating, yet analysts tend to highlight that Japan experiences a fourth wave of the pandemic, with intensified lockdown measures.
So, the path of the pandemic tends to remain a threat to the demand outlook of the commodity.
Vaccination improves demand outlook for oil
On the other hand, though oil’s prices tell a different story, as they are on the rise since the start of the week.
It seems that hopes for an improvement of the demand outlook are on the rise.
The vaccination in the UK and the US is intense and in Canada as well as Europe, the pace of vaccination is improving considerably, increasing the chances for a quicker return to some sort of normality, hence also an improvement of the demand outlook for oil.
OPEC’s confidence in oil’s demand
It’s characteristic that the OPEC group along with its allies such as Russia, also known as the OPEC+ group remained rather optimistic regarding the demand outlook of oil.
The group reportedly ditched a ministerial meeting on Wednesday, sticking to its plans to ease production cuts, which was perceived as a sign of confidence on behalf of the group for the demand side of oil to rebound in the coming months.
In a report by OPEC+ experts, the group forecast for global oil demand in 2021 would grow by 6 million BPD, after falling 9.5 million bpd last year.
Please note that the OPEC+ group’s, next ministerial meeting is scheduled for the 1st of June, to discuss the July-August output levels.
Hence as long as optimism for the recovery of oil’s demand-side outweighs worries created for the resurgence of the pandemic, we expect fundamentals to remain rather bullish, yet it should be noted that oil prices are already at rather high levels.
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Comment by Diletta
March 26, 2024
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